Ask an expert

Do you know if fuel retailers have taken into account the reduction of the price in carbon from above $20 per tonne of carbon to the current price of $6 per tonne? I see on the AA website that the ETS adds about 3cents per litre. Does this take into account the fall in carbon price? Being a sceptic I imagine the fuel retailers are just pocketing the difference rather than passing on the fall in carbon price.

Our current monitoring of commodity prices assumes an ETS cost of 1-2 cents per litre, which takes into account the lower carbon price, but is deliberately conservative because we do not know what fuel companies are paying (or whether they bought in bulk at an earlier higher price) as the ETS scheme does not require them (or any emitter) to disclose this price so we can never know if savings are being passed on. In any case, while carbon prices have fallen sharply, the impact on retail prices is minimal because of the current 2-for-1 deal.